U.S. stocks showed promising signs of a rally on Sunday night, buoyed by the Trump administration’s negotiation of a trade deal framework with China. This agreement aims to prevent a situation of mutual destruction in trade relations between the two economic powerhouses.
Treasury Secretary Scott Bessent outlined key aspects of the tentative agreement, which includes China easing its restrictions on rare earth exports and committing to purchase “significant” quantities of U.S. soybeans. In exchange, President Donald Trump is expected to retract his threat of imposing 100% tariffs on Chinese goods.
A pivotal meeting between Trump and Chinese President Xi Jinping is scheduled for Thursday at a regional economic conference in South Korea, where the two leaders will finalize the details of the trade deal.
As a result of the positive news, futures associated with the Dow Jones industrial average climbed 312 points, or 0.66%. S&P 500 futures were up 0.75%, and Nasdaq futures increased by 0.91%, building on the previous Friday’s rally that had seen fresh record highs.
In the bond market, the yield on the 10-year Treasury remained steady at 4.003%. The U.S. dollar experienced minor fluctuations, decreasing by 0.03% against the euro while rising 0.16% against the yen. Gold prices dipped by 0.59%, settling at $4,113.40 per ounce. On the energy front, U.S. oil futures rose by 0.80% to $61.99 a barrel, while Brent crude saw a 0.76% increase, reaching $66.44.
Wall Street is also gearing up for a key Federal Reserve policy meeting that will wrap up on Wednesday. Investors are largely anticipating another quarter-point rate cut, which would adjust the benchmark rate to a range of 3.75%-4.00%. This expectation follows the consumer price index for September, which rose slightly but fell short of projections, allowing the Fed to prioritize maximizing employment over battling inflation.
The upcoming week promises to be active for technology earnings, amid a growing sentiment that the artificial intelligence boom may be transitioning into bubble territory. Major tech companies, including Meta, Microsoft, and Alphabet (Google’s parent company), are set to report earnings on Wednesday, while Apple and Amazon will follow suit on Thursday.
